WASHINGTON—President Obama's call last week for extending the COBRA premium subsidy increases the likelihood that Congress will renew the program, experts say.

In a speech at the Brookings Institution in Washington, President Obama said last week that the COBRA subsidy for laid-off employees is one of several economic relief provisions that lawmakers should extend.

“The administration will be working with Congress to ensure that those hit hardest by this economic crisis continue to receive the support they need....This includes the Recovery Act provision that helps out-of-work Americans keep their health insurance through COBRA,” President Obama said.

The subsidy, embedded in a massive economic stimulus bill President Obama signed in February, has paid 65% of COBRA premiums for employees involuntarily terminated from Sept. 1, 2008, through Dec. 31, 2009, for up to nine months.

“The chances of an extension were already high and administration support makes it even more likely,” said Chantel Sheaks, a principal with Buck Consultants L.L.C. in Washington.

Without an extension, employees laid off starting Jan. 1, 2010, will be ineligible for the subsidy, as would current beneficiaries who have hit the nine-month limit.

While presidential support boosts its chances, some said the odds already favored an extension of the COBRA subsidy.

“Presidential support may not even be needed. There is a high level of congressional interest in an extension,” said James Gelfand, senior health care policy manager at the U.S. Chamber of Commerce in Washington.

“While business is not excited about an extension, we are pretty much resigned to it,” said Neil Trautwein, vp and employee benefits counsel with the National Retail Federation in Washington.

It isn't clear, though, whether Congress has enough time to approve extension legislation yet this month and, if it does, what form it will take. Some observers say the provision could be attached to a “must-pass” bill that would continue funding for the Defense Department.

Also not known yet is the length of the extension and whether it would be retroactive for beneficiaries whose eligibility for the subsidy has expired or been exhausted.

Under bills already introduced in the Senate and House, current beneficiaries could receive the subsidy for an additional six months, while employees who lose their jobs from Jan. 1, 2010, through June 30, 2010, would be eligible for subsidized COBRA premiums for up to 15 months.